Monday, January 4, 2010

Plus ça change ….

How often does one use that title about all sorts of political developments? It's not that there is never any change. There have been many times in history, even recent history, when great changes were enacted. However, one of the things that never seems to change is the behaviour of transnational organizations who continue to spend huge amounts of taxpayers' money to set up more organizations, meetings, conferences and committees to try to control the world's economy. By and large they fail though in the process they manage to undermine real economic development through all those taxes and regulations.

A fascinating article in the Wall Street Journal reminds us of a failed predecessor to the recent Copenhagen Circus Conference, a similar event that took place in Lima in 1975. "Both conferences were failed, taxpayer-funded attempts to institute global economic governance."

I must admit that until reading that article I had not been able to recall the Lima Conference. Even now my memory is experiencing severe difficulties. In other words, the author is correct: these events do disappear from one's horizon.

However, I do recall the political and ideological (I hesitate to use the word intellectual) background:

Lima '75: Those were the good old days of "Third Worldism." The developing countries, spurred by the demonstration of force by oil exporting countries during the oil shock of 1973, called for the institution of a "new international economic order" (NIEO), aimed at securing a better place for these countries in the world economy. Once the call was made, international organizations started aligning their work programs toward that grandiose objective.

It should be recalled that in those days the dominant view in the corridors of international organizations favored strong state intervention in economic affairs. The prevailing view had its dissidents: Bela Balassa, an economist at the World Bank, as well as Little, Scitovsky and Scott, authors of a report commissioned by the Organization of Economic Cooperation and Development (OECD), to mention a few. These economists argued that developing countries would do better to place their hopes in the interplay of market forces rather than in state interventionism and, accordingly, should adopt policies aimed at encouraging foreign investment and improving the international competitiveness of their goods.

The governments of many developing countries that adhered to the dominant view arrived at Lima with the firm intention of obtaining the international community's endorsement of a "plan of action," stipulating that 25% of the world's industrial production should be generated in the Third World by the year 2000.

Nothing much came out of Lima but since then there have been adjustments in the economic balance of the world. An ever larger percentage of the world's industrial proeuction is generated in developing countries, a number of which no longer count as such, having developed quite well in the last thirty years. The thing is that all this happened to countries that abandoned the consensus of the seventies and accepted the views of those dissidents.

What of Copenhagen? What did that produce apart from a great deal of hot air and the coldest winter spell that city has seen for a long time?

Like third-worldism in the 1970s, today's environmentalism has its dissidents. There are many. They do not deny the existence of global warming, but question the role of human activity in this phenomenon. In addition, they tend to advocate technological innovation, rather than restrictions on the emissions of carbon dioxide, to deal with the impacts.

Like Lima, the conference in Copenhagen did not go beyond the declaration of intentions. Agreement was not reached on concrete measures to drastically reducing carbon emissions. And just as Lima relegated the hardest discussions to a series of consultations, so Copenhagen sent negotiations to another conference next year—without explaining why agreement would be easier in 2010, the year of mid-term elections in the United States, which will make the American Congress even more reluctant to alienate voters by approving costly measures to deal with global warming.

Beyond their differences, Lima and Copenhagen suffer from a common handicap: Both conferences were a failed attempt, at the expense of taxpayers around the world, to institute global economic governance by imposing quantifiable targets on the 192 member nations.

Fabio Rafael Fiallo, the author of the article, is reasonably optimistic. Lima, he thinks was the high point of "third-worldism" and Copenhagen will prove to be the high point of "environmentalism". The result will not be dissimilar: environmental and economic advances will happen if the consensus is abandoned and the dissidents who are far more vociferous now than they were in the seventies, by the way, will be listened to.

Taking the analogy between the two conferences a step further, it is possible to conclude with a note of optimism. In the same manner that developing countries succeeded in increasing their share in world industrial output through international competition, irrespective of the Lima planning, so one can expect that the issue of global warming will be dealt with, not through the Copenhagen Accord, but by technological innovations, notably those falling within the category of geoengineering. These techniques aim at capturing carbon emissions or, more directly, at cooling the climate.

I am not qualified to express an opinion on the warming/cooling/not going anwywhere special debate but I do understand the politics and, on the whole, I agree with those sentiments. However, I have to add a somewhat pessimistic rider.

These people do not give up. If they cannot get a plan for the world economy one way they will try another way. There will be more taxpayer-funded conferences and attempts to interfere with markets and economic developments. This time round we must grasp what the new ideology is before it takes serious root.

3 comments:

"These people do not give up. If they cannot get a plan for the world economy one way they will try another way."

I couldn't agree more. I am surprised (I suspect that you are not) at the number of organisations springing up, associated with the EU, or the UN, that are pushing for the world economy and a world organisation to implement it.

I have never seen an opertunity like this, most politicians have climbed off the fence, we are now presented with an accurate list ow whom we can trust, and more important who should be in court for treason, to be on the AGW/carbon credit/ A Gore side shows either dementia or absolute corruption, this is a list I want to see published!

One can only hope that the author of the WSJ article is right. At this time here in the US we are having a "historically" cold spell all the way down to Florida! I believe the people that do not really pay attention to things like Copenhagen would have a laughing fit if Al Gore starting making noise about AGW! Stay warm over there in the UK!